Travis D. Stice, chairman and CEO of Midland-based Diamondback Energy, said Monday in his announcement of reduced spending for 2025 that “it is likely that U.S. onshore oil production has peaked and will begin to decline this quarter.” Diamondback is reducing its 2025 fullyear capital budget by about 10 percent to $3.4 billion to $3.8 billion – down from $3.8 billion to $4.2 billion previously. Stice added, “We now expect to drill between 385 and 435 gross wells and complete approximately 475 to 550 wells. We are dropping three rigs and one full time completion crew in the second quarter, and we expected to be at these levels through the majority of the third quarter.”
Stice said the combination of global economic uncertainty (lower demand) and an increase in expected OPEC+ production (higher supply) has lowered oil prices and raised volatility. Stice said the count of frac crews in U.S. is down 15 percent this year, and the count in Permian Basin is down 20 percent. “And both are expected to decline further,” he added. “We also expect the U.S. oil directed rig count to be down almost 10 percent by the end of second quarter and decline further in third quarter.”
In first quarter Diamondback produced 475,900 barrels of oil per day – above high end of guidance of 470,000 to 475,000 b/d. Capex was $942 million – below midpoint of guidance of $900 million to $1.0 billion. Forecast for fullyear oil production also is down to 480,000 to 495,000 boed – about one percent below prior guidance.
At the company’s annual meeting later this month, Stice will become executive chairman as Kaes Van’t Hof assumes the role of CEO.
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